KUALA LUMPUR: BM Greentech Bhd (BMG) has signed a term sheet with the shareholders of solar firm Plus Xnergy Holding Sdn Bhd (PXH) to acquire the company for RM110 million, to be paid with new shares in BMG.
BMG signed the agreement with Ko Chuan Zhen, Leong Beng Yew, Oh Siang Hwa, Oh Zhi Kang, Poh Tyng Huei, Smiling Planet Sdn Bhd (SPSB) and Tenaga Wan Foong Sdn Bhd (vendors).
Since its inception in 2013, the PXH group has achieved a track record of solar photovoltaic installed capacity in excess of 400 megawatt-peak (MWp) which generated 2,000 gigawatt hours (GWh) of clean energy as of March 2024. PXH's business activities focus on clean energy engineering, procurement and construction (EPC) services as well as asset development.
The vendors of PXH group have provided an accumulated profit guarantee of not less than RM44.0 million during and for the entire period of four years.
The terms of the proposed acquisition will be formalised in a conditional share sale agreement (SSA) to be entered into within 30 days from the date of the term sheet, the company said in a filing to Bursa Malaysia.
The purchase consideration will be paid through issuance of 81.48 million new shares in BMG at RM1.35 per share.
BMG plans to issue new BMG shares at RM1.35 a piece to its direct holding company, QL Green Resources Sdn Bhd, a subsidiary of QL Resources Bhd with the aim to maintain QL's shareholdings in BMG above 50 per cent of the equity interest in BMG.
"The term sheet demonstrates BMG's long-term commitment to its vision to be the regional partner of choice for innovative and cost-effective green energy and water solutions which achieve lasting sustainability. "As the regional leader in biomass energy solutions provider and an emerging rooftop solar photovoltaic company, the proposed acquisition will strengthen BMG's position as the leader in diversified clean energy solutions provider in the region," the company said.
The board also expects that the proposed acquisition will foster a synergistic partnership between BMG and Plus Xnergy and is envisaged to drive mutual growth of both groups of companies moving forward.
BMG will also inject additional equity funding of up to RM50 million to fund the PXH Group's business growth and expansion.
The company's share price jumped as much as 15 per cent on news of the acquisition, reaching a high of RM1.96 a share.
As at 3.45pm it was trading 14 per cent higher to RM1.91 a share, giving it a market capitalisation of RM1 billion.
Some 7.3 milion shares changed hands.